Finans Romania

Summary of Proposed Investment

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.

Project number	25036
Company name	Credit Europe Bank (Romania) S.A.
Country	Romania
Sector	Finance & Insurance
Environmental category	FI
Department	Global Financial Markets Group
Status	Active

Date SPI disclosed	June 23, 2006
Projected board date	July 26, 2006
Previous Events	Invested: December 15, 2006 Signed: November 24, 2006 Approved: November 17, 2006

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

The proposed transaction consists of a 7-year loan to Finansbank Romania (the Bank or FB), a fully controlled subsidiary of a former IFC client, Finansbank A.S. Turkey, for up to EUR20 million. The objective of this transaction is to enable the Bank to access long term financing to fund its expansion in the growing sectors of the Romanian economy in particular SMEs.

FB was a result of the acquisition of Banca de Credit Industrial si Comercial SA in Romania in 2000. It is a small dynamic bank with 1% market share in terms of total assets. Finansbank Romania is providing a wide range of SME, corporate and retail banking services.

Anticipated development impact of the project

The development impact of this transaction would include:

- providing long term funding to fast growing Romanian SMEs that have become a significant engine of growth;
- strengthening the Bank’s balance sheet, improving its asset liability management and enabling the Bank to expand its financial intermediation capacity.

This project is expected to have a high development impact impacting SMEs. The bank is focusing its lending activity on the SME sector. This is a strategic sector to IFC in Romania which is still under-serviced and is one of the most dynamic sectors of the economy. The project is expected to improve SME access to finance by meeting critical capital investment needs and supporting their growth, and will have a demonstration effect by encouraging other financial institutions to increase lending activities to the underserved segment.

IFC's expected development contribution

IFC’s role is threefold:

- support south-south investments;
- enhance provision of term financing to SMEs, a sector that is considered the driving force of the Romanian economy;
- encourage improvements of sustainability standards including the environmental and social ones of the EU banking guidelines.

Environmental and social issues - Category FI

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC will analyze the FI portfolio and determine the Applicable Requirements based on an analysis of the potential Environmental and Social risks associated with the FI portfolio. The Applicable Requirements would include:

- the IFC Exclusion List and/or
- the National Environmental and Social Laws

Based on the Applicable Requirements, the project will be required to:

- develop an Environmental and Social Management System (ESMS), prior to disbursement that is satisfactory to IFC, to ensure that its investments/activities are in compliance with Applicable Requirements.
- identify responsible qualified persons to manage the ESMS.
- commit to implement the ESMS and take action to remedy any gaps in ESMS implementation on an ongoing basis.

IFC PROJECTS